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Leaky Buildings – Another View

The following is an excerpt of the June 2006 report: “Another view on New Zealand’s weathertightness or ‘leaky building’ crisis” – the report details the scope of the problem, and goes into detail of the governments findings. The full report is available for download here

At long-last there is recognition by Government that at least 15,000 homes – albeit about a third of some industry estimates — are affected and that the preferred mediation strategy of the WHRS has to be replaced by speedy adjudication that does not leave the victims settling for about half of the cost of restoring their homes.

However, we must remain sanguine in that little has been done in the four years since the 2002 Hunn Commission of Inquiry, to implement the necessary changes that report highlighted. The supposedly tightened legislation rushed through in 2004; with its stated aims of ensuring that the highest building standards — lost in the 1990s — were regained has been a dismal failure.

This has been belatedly recognised with the launch of a discussion document, ‘Building for the 21st Century – Review of the Building Code’ by Building Issues Minister, Clayton Cosgrove, just 10 days after he announced a clutch of measures to reinvigorate the faltering WHRS. The Code re-sets the performance-based standards for building design and construction, and as the minister noted at its launch, this will be its first substantive review since its introduction in 1991.If the 1991 legislation was the beginning of the end of proper standards in our industry; we can but hope that this will mark the end of the beginning –.to do something about reinstating them.

Legislation based on the outcome of discussions around the paper will take at least two more years.
Unfortunately, it will also take a further two years before the various WHRS ‘pilot schemes’ are reviewed and one would hope are finally rolled out in full. All the time the 10-year clock is ticking for owners. The Leaky Homes Action Group, which was galvanized into action in the lead up to the last election, has campaigned for the 10-year cut-off to be removed — until all the affected homes are restored. To date the Government is ignoring their plight.

The builder licensing scheme announced in late April kicked off the month-of- action from the Minister of Building Issues. It has always seemed an anomaly that builders in this country are not licensed, while plumbers, gas fitters and drain-layers and the like, have to be. This move should pave the way for another major industry, insurance, to return to the party. Along with the timber industry, insurance companies simply disappeared into the cracks in the wall at the first sniff of being in a position where they might have to pay out, rather than take in large sums of money.

Property developers have watched with some satisfaction the recognition by Government and some of the media that we too, in some cases, have suffered at the hands of:

weak legislation;

shoddy workmanship, brought on by the less fettered and lightly regulated environment of the 1990s and early 2000s, and the near-death of trades’ training;

the untreated timber scandal that arose from a misguided plan to support that industry at a cost to everyone else;

the “phoenixing” of the BIA — unquestionably the most cynical act perpetrated by anyone in this whole sorry saga;

the $6-million Government legal war chest ‘to defend the indefensible’; and

the Government’s lack of preparedness to learn from the experience of Canada and the USA.

(This latter failing was partially remedied by Auckland University’s funding the
attendance of two leading academics from those countries to a mid-2005 workshop which a number of Government entities boycotted! Speaking at the conference, Prof Joe Lstiburek noted: “Even if Governments do talk to each other, it is in their political genes to project their own problems as unique.”)

The New Zealand Appeal Court has struck out the joining of the BIA(the Government/DBH) for its failure to act in protecting home owners from the malpractice that it now transpires was so clearly rampant in the industry at the time. But while the Government has escaped the lash, Territorial Authorities, particularly Auckland, have carried the can; well, their ratepayers have and will continue to do so for at least another two years, until the new dispensation kicks in. There will be a Council election in that period.

Other issues that have slipped below the parapet include the practice of home owners making token repairs to homes and knowingly passing them on, thereby extending the problem, and the health issues facing those in damaged homes. The latter, particularly, is a focus of multi-million dollar claims in North America. There is no sign of any progress in dealing with leaks generated inside the home by taps, showers or appliances either.

Up until about 18 months ago, a number of property developers – and even their families – were being victimized and pilloried in their daily lives after certain media implied that we had supposedly single-handedly brought about the leaky homes disaster and the ruination of many people’s lives. Fortunately some of the realism that has crept into the debate around the resolution of the matter has given the lie to that; some consolation to those of our number like Timothy Terence Manning, Tony Gapes, Rick Martin and Nigel McKenna, who were unfairly blamed for ‘the entire problem’, even though their developments, overall, had below average levels of leaks.

The quartet are only ‘guilty’ of taking on the established way of doing things in the local market, at different times, and that has put some influential noses out of joint.
Some of the statistics in this report — all gained from official sources(see end notes) — demonstrate where the blame truly lies. Property developers are a blip on that screen.